Pensions And Other Employee Benefit Plans

3 Months Ended

Mar. 31, 2013

Pensions And Other Employee Benefit Plans [Abstract]

Pensions And Other Employee Benefit Plans

14. Pensions and Other Employee Benefit Plans

The following table provides the components of net periodic cost included in income from continuing operations for our qualified and supplemental retirement plans (the “Pension Benefits”) and health care and life insurance benefits for retired employees and dependents (the “Other Benefits”) for the three months ended March 31, 2013 and 2012 (in thousands):

	Pension Benefits Three Months Ended March 31,				Other Benefits Three Months Ended March 31,
	2013		2012		2013		2012
Service cost	$	147	$	200	$	2	$	2
Interest cost		463		622		10		11
Expected return on plan assets		(427)		(364)		—		—
Amortization of net actuarial loss		1,503		173		4		2
Amortization of prior service credits		—		—		(6)		(6)
Net periodic cost included in income from continuing operations	$	1,686	$	631	$	10	$	9

Sale of SS/L

As required by the Purchase Agreement, prior to the closing of the Sale on November 2, 2012, new stand-alone SS/L pension plans were established. Pension obligations related to SS/L current and former employees and plan assets determined through an initial allocation methodology were transferred from the Loral pension plans to the newly formed plans. With the closing of the Sale, the newly formed SS/L plans were transferred to SS/L. Subsequent to the closing of the Sale, our actuary performed a review to determine the amount of qualified plan assets that proportionately relate to the benefit liabilities of the SS/L pension participants in accordance with the asset priorities of Section 4044 of ERISA. This review resulted in a true-up of the initial asset transfer between plans. The net effect of this true-up, which took place in April 2013, was a $1.2 million increase to Loral’s cash balance and a $1.2 milliondecrease to the assets of Loral’s qualified pension plan.

Termination of Supplemental Executive Retirement Plan (“SERP”)

In connection with the corporate office restructuring as a result of the Sale, on December 13, 2012, Loral’s Board of Directors approved termination of the SERP. The Company expects to make lump sum payments to the participants in the SERP between December 16, 2013 and December 31, 2013 in accordance with the requirements of Section 409A of the Internal Revenue Code and the regulations promulgated thereunder. Other current liabilities as of March 31, 2013 and December 31, 2012 included approximately $18.2 million and $18.1 million, respectively, for future SERP payments based on benefits earned, including recurring monthly payments to December 2013 and lump sum payouts in December 2013. The lump sum payouts have been calculated based on plan provisions.